The Losers of This Car Race Will Be Green with Envy

As automakers fight for sales around the world, pressure is mounting on
them to gamble billions on developing alternatives to greenhouse gas-producing
fossil fuels. The choice each makes now will have long-term effects, reports
David Crossland ofThe National.

The world's car manufacturers are being forced into a huge gamble that will
turn some into successful visionaries and others into abject losers.

They face a simple quandary-all of them need to develop affordable vehicles
that do not use fossil fuels. But none of them can say for sure which green
technology will come out on top-pure electric cars, hybrid vehicles,
hydrogen-powered cars, or ones that run on fuel cells.

Ask different car makers and you will get different answers.
BMW (Germany: BMW), the world's largest premium car maker, is placing its
faith in pure electric drive technology. It will be launching its first
mass-market electric car, the i3 plug-in hatchback, at the end of the year.

Its domestic and global competitor Audi (Germany: NSU) is opting
for plug-in hybrid models combining an electric engine with a combustion engine.
Another German maker, Daimler (Germany: DAI), is
tenaciously researching fuel-cell technology. Meanwhile,
Renault (Euronext: RNO), the French
manufacturer struggling as sales tumble, has just launched its fourth electric
model, the Zoe.

It's a daunting prospect to invest billions of euros in electric vehicles at
a time when there are just 12,000 of them on Europe's roads, without nationwide
networks of charge points and with engineers constantly coming up with radically
different solutions for electric cars-ranging from battery-switching stations to
charging on the move through adaptive road surfaces.

But they have no choice. All around the world, governments are tightening up
emissions restrictions. At the moment, German premium brands are enjoying record
sales growth for their combustion vehicles in emerging markets such as China-but
that could change overnight.

"Take the example of Beijing," says Gregor Matthies, an car analyst at the
strategy consultancy Bain & Company. "The streets are constantly congested,
the population is suffering from the smog. The same is true of other Chinese
conurbations.

"If such cities suddenly introduce travel limits on combustion cars, and
something like that can happen very fast in China, that would be a major blow to
the German manufacturers that are very successful there."

At present, many electric vehicles are still prohibitively expensive. A small
electric car can cost as much as a premium combustion vehicle. And the range
tends to be limited to just 100 or 150 kilometers per charge.

Car makers are working to make electric cars more affordable. The Zoe is
competitively priced at ?21,700 ($28,350), on a par with mass-market petrol
peers. But state help in boosting demand and setting up an infrastructure for
electric cars is likely to prove crucial.

A number of governments have introduced purchase grants. France, for example,
subsidizes electric-car purchases by as much as ?7,000, or up to 30% of a
vehicle's price. Germany, surprisingly given its commitment to green energy, has
no such purchase subsidies-but may need to change its mind if it wants to meet
its ambitious pledge to have a million electric cars on German roads by
2020.

In Britain, the purchase grant is ?5,000 ($7,616) or up to 25% of the car
price. The British government, which has devoted ?400 million to promoting
demand for so-called ultra-low carbon vehicle technology, offers grants for
setting up electric vehicle charge points under a scheme launched in early
2011.

The Plugged in Places project in eight regions of the country has provided
2,800 charge points so far, 70% of which are publicly accessible along streets
and in parking lots, according to the UK department of transport. That is in
addition to some 5,000 charge points set up by other organizations.

Most electric vehicles are expected to be charged at home or at work. But a
dense public infrastructure of charge points is vital to making potential buyers
confident they are a viable alternative, say experts.

There are three types of chargers being set up in public areas. Rapid systems
can recharge a vehicle in about 20 minutes, and are installed in busy locations
or near strategic road networks where many people can access them in quick
succession. Fast chargers, which reload batteries in two to three hours, are
suitable for parking garages, and standard chargers-up to six hours-are being
fitted in long-stay lots.

The aim of the project has been to gain experience and start to develop
infrastructure, the lack of which is a major deterrent to buying an electric
car. After all, if the range of your car is just over 60 miles, you are going to
worry about getting stranded without places to recharge.

Plugged in Places is an ongoing project. Launched two years ago, the
match-funding state grant has now been extended to more regions of Britain. In
addition to providing more charge points, it has helped to provide valuable
insights into the use of electric cars.

Their limited range, it appears, is less of a drawback in practice than one
might think, according to research undertaken by Newcastle University in the
north-east of England, one of the regions targeted in the Plugged in Places
program.

The university logged the driving and charging patterns of 44 electric
vehicles and came to a surprising conclusion. "Journeys taken with electric cars
were only just short of the national average for normal cars," says Yvonne
Huebner, a senior research associate at Newcastle University.

"I think people overestimate how far they drive, because nationally in normal
private cars, 93% of the time people go under 20 kilometers. Even if you go
there and back, that's less than the range of an electric car. Some people did
push it-there was one journey that was 117km long," she adds.

"You speak to a lot of drivers, and the more they drive the cars, the more
confident they get. [Electric cars] accelerate brilliantly."

Huebner says many people were put off electric cars by "range anxiety," but
adds increasing the number of charge points and getting more people to try
electric cars would help to ease that.

"What I've seen is that as soon as you get people into the cars and get them
to experience them, they're converted," she says. "It's important to get a
critical mass of people who experience driving an electric car. If that
happened, you'd probably get a big push in market demand. But unless you get
people into the cars, I think it will be very slow progress."

Similar projects are underway around the world. Germany currently has 2,000
charge points, and various cities and regions have launched publicly assisted
schemes to boost that number.

The European Union this year called for the construction of hundreds of
thousands of charge points across the EU, with the German-designed Mennekes
connector chosen as the norm for Europe.

Lars Thomsen, the founder of the consultancy Future Matters, which researches
technology trends, said the next generation of electric cars will have a far
greater range of 150 to 190 miles, which should banish most people's range
anxiety. And their prices will fall sharply.

"Technology change usually goes hand in hand with business logic," he says.
"At some point, the tipping point will be reached: when the new technology is
cheaper to buy, drive, and maintain while offering the same driving performance,
range, and speed. With electric cars that will be as soon as 2016-2017, based on
current developments.

"What's got to come now-and this makes the years 2013 and 2014 so crucial for
electromobility-is the products," Thomsen says. "They've got to be attractive,
they've got to be every bit as safe and comfortable as conventional petrol and
diesel cars, and they have to be marketed accordingly."